Cryptocurrency: Birkins for Geeks

Women bring pawnbroker Tabach-Bank their Birkins as collateral for loans. “We get socialites and a lot more divorcees in Beverly Hills than New York for some reason,” Tabach-Bank, CEO of New York Loan Company, told the New York Times.

Birkin’s are apparently a handbag by Hermès that cost thousands of dollars and can run into fix-figures. Unlike most hedge funds, Birkin bags consistently outperform the S&P 500 as an investment. Also, like hedge funds, only the rich and famous can buy them.

Google returns 567,000 results for “knockoff hermes birkin” which, predictably, cost slightly less and are more democratically distributed. Expert Tabach-Bank says he can usually tell a fake but “if you haven’t bought a fake, you haven’t been dealing in enough bags.”

Which brings us to cryptocurrencies. Assuming that you’re not trying to, say, channel large amounts of money out of China, purchase illegal drugs, or launch a libertarian enclave what’s the point? What’s wrong with the dollar? Or Euro? Or Renminbi? Or Venezuelan Bolívar. OK – pretty much everything is wrong with the Venezuelan Bolívar. But the rest are usually alright.

The whole fiat currencies suck argument doesn’t resonate because there are plenty of currencies to choose from and there’s a whole smorgasbord of stocks and other financial products if you don’t trust government regulators.

I have a theory: Bitcoins are digital bling.

Like most products based on brand value, Birkin handbags have an origin story. In 1983 Hermès CEO Jean-Louis Dumas was seated next to Jane Birkin on a flight from London to Paris when her straw bag fell to the deck.. Voila — a leather version, with a latch, at 1,000 times the price — seemed like a great idea. Sure they could’ve put a latch on the straw bag, or tied it with a string, or used a regular carry-on, or a grocery sack, but let’s run with the story.

Bitcoin also has an origin story. It appeared essentially out of nowhere, on message boards and in IRC chats, a series of theories and code to make and track a new cryptocurrency.

Researchers had theorized about making a type of digital gold but nobody ever seriously advanced the project. On Aug. 18, 2008, the domain name bitcoin.org was registered and on November a link to a paper by the mysterious Satoshi Nakamoto describing a peer-to-peer electronic cash system was distributed on a cryptography mailing list.

By January 2009, with the world economy melting, Nokamoto mined the first block of bitcoins and sent ten to programmer Hal Finney. In 2016, Australian Craig Wright claims to be the real inventor, and had the cryptographic keys to back the claim up, but nobody’s entirely sure.

By now everybody knows the rest. Bitcoin came out of nowhere and went from worthless to, according to Google, $5,670 per bitcoin today. I’ll admit to telling my brother-in-law not to waste his money when it was at $200. Sorry about that Alex.

I was wrong then and I’ll admit to the possibility that I’m wrong now. Maybe it’s just me, or maybe I run contrary to the Winklevoss twins, but bitcoin seems like a digital tchotchke, ideal for illegal drug deals but not much else.

Then again, Birkin bags aren’t much more useful than the straw one’s they sprung from.

Stripped of an ability to impress with bling or family background what’s an aspiring techie to do? Create and embrace digital bling, then crank the volume of it to 11. Sure the blockchain technology has genuine value, and the Birkin bag can no doubt hold lots of stuff, but the price of either far exceeds the utility value.

Does that mean Bitcoin and the rest will crash. I’d say yes but, after what I did to poor Alex, I wouldn’t listen to myself on this subject. I believe that Bitcoin is genuinely worthless but others don’t. You can buy a Tesla with it in Eastern Europe, certain forms of travel or hotels, or a college degree from Cyprus. Lots of links say Howard Johnson’s used to accept Bitcoin but a Reddit poster says they stopped when their bitcoins vaporized in 2011, one of the few times I’m willing trust Reddit because who could make something like that up. I didn’t even know HoJo still existed, though I digress.

Apparently Bitcoin still works great for it’s original killer idea, buying pot.

At $5,600 per bitcoin, an early investor could buy an enormous amount of pot. Smoke enough of it and you might even believe there isn’t a bubble. Having lived through the dot-com bubble in CA then the housing bubble in FL I wouldn’t be surprised to see the price of bitcoin evaporate in a cloud of smoke.